Building a Startup in a Revolution

ANTALYA, Turkey—Egypt might seem like a difficult place for tech entrepreneurs to flourish at present, in the wake of the Arab Spring and subsequent political turmoil.

In reality, the vast majority of the violence and protests has been confined to Cairo’s Tahrir Square, according to young entrepreneurs from the Cairo accelerator Flat6Labs who attended the Startup Turkey conference in this Mediterranean resort town.

“Mostly what is happening in Egypt is only happening in Tahrir Square,” said Amr Sobhy, CEO of a pushbots.com, a startup that helps mobile developers. “We work in Giza and most of the time we don’t even know what is happening in Tahrir Square. It is not like the media shows it.”

It’s a view echoed by Abdelmoniem Ragab, CEO of asknative.com, a travel social network. “My new office is in front of the presidential palace,” he said. “Every two or three days there is a clash. But they are small groups now; it is not a big deal.”

So what do these entrepreneurs worry about? It turns out exactly the things that plague entrepreneurs the world over: can I find the right developers? Is my business model correct? Should I develop a mobile app? It all seems very ordinary.

But while it is possible to overstate the impact of Egypt’s revolution, it is just as easy to understate it. Two years on, and amid the political uncertainty that remains, was the revolution good for entrepreneurship? There is a mixed view.

“It fueled the whole entrepreneurship thing,” said Mr. Sobhy. “It made it psychologically possible that people now realize they can achieve something.”

“The best thing about the revolution is that they [the people] forgot about the fear,” said Mr. Ragab.

But on the one hand there is a real sense that lawlessness had increased. “Thugs stole our Internet connection,” said Mr. Ragab. “Imagine this: working without Internet for an Internet company. We rely on 3G.”

“The best thing about the revolution is that [the people] forgot about the fear.”

The uncertainty has also rattled investors. “Some investors became afraid because we are based in Cairo,” said Hussein Al-Sakkaf, CEO of goejaza.com, a site for Arabic travelers. “This may make investors think twice before investing. I found one who said ‘If you relocate to Saudi, then we will invest.’”

However, set against the turmoil in the country, the young entrepreneurs accept that their needs come far down the government’s priorities.

“I think the government has harder problems to solve,” said Mohammed Shaaban, CEO of eshtery.me, a shopping app. “They are preparing for entrepreneur programs, but this is not going to happen anytime soon so we have to do it ourselves.”

“They are old fashioned. They don’t really get it, but they are doing their best,” said Mr. Sobhy. “But they do have a lot to do. Bread, security, freedom, oil… Entrepreneurship is, like, ‘we’ll come to that. We need food first.’”

“Egypt has become a hub for entrepreneurship in the Middle East region.”

So what do they want? Not very much, and certainly not aid. “[The startup culture] is going to be driven by the people, not by the government. It has to do its work — it has to have the laws that allow entrepreneurs and angels and VCs to exist. We need less red tape to get things done — but we will do the rest ourselves.”

Mr. Sobhy said that after decades of misrule, the legal framework isn’t fit for the modern age. “The laws of Egypt that serve businesses are so outdated and do not serve the needs of small and medium-sized enterprises. It is tailored for corporates. You have to pay lots of taxes — like nine different ones. It is not designed for startups at all.”

“I was an entrepreneur before the revolution, but I didn’t know the word entrepreneur.”

All four said simple things that are taken for granted in the U.S. just aren’t possible in Egypt. “It is very hard to fire people,” said Mr. Shaaban, and while it is possible to give workers share options, there is no concept of vesting. “You could give someone options one day and the very next they can sell them,” said Mr. Ragab.

As we parted they were once again keen to dispel this idea of Cairo being wracked by turmoil — an image for which they blame the media.

Mr. Al-Sakkaf is a Yemeni expatriate. “My family call me from Yemen and ask me if I am safe, because they are watching everything on the television. ‘There is protest. People are being killed in Cairo.’ And we’re like “Seriously? There is a protest? Where?’”

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